The Employment Relations Amendment Act 2026 changed how personal grievance remedies are assessed, and the change has an implication employers may not immediately notice: the investigation matters more, not less.
Why
Under new section 123B, where an employee’s actions contributed to the situation and amount to serious misconduct, the Authority or Court must not provide any remedy at all. Where contributory conduct falls short of serious misconduct, reinstatement and compensation for injury to feelings or loss of benefits are unavailable, and remedies can be reduced by up to 100 percent.
Both outcomes depend on establishing what the employee actually did. An employer who cannot evidence the conduct cannot rely on it, however confident they are that it happened.
So the change rewards employers who investigate properly and offers nothing to those who dismiss on impression.
What a defensible investigation looks like
- Establish the allegations specifically before meeting anyone. “Performance concerns” is not an allegation; a described incident on a described date is.
- Gather the evidence first — documents, records, system logs, CCTV where relevant.
- Interview witnesses and record what they said, contemporaneously.
- Put the allegations and the evidence to the employee, in writing, with adequate notice.
- Allow representation and genuine time to prepare.
- Hear the response with an open mind, and follow up anything they raise that could change the picture.
- Decide, and record the reasoning, including why an explanation was rejected if it was.
The most common failure remains a predetermined outcome dressed as a process. Authority members are experienced at identifying decisions made before the meeting, and that finding also undermines your ability to establish contribution.
Serious misconduct versus misconduct
The distinction now carries much more weight, because serious misconduct removes remedies entirely.
Serious misconduct is conduct that fundamentally breaches the employment relationship — theft, violence, serious dishonesty, serious breach of safety rules, serious harassment. It generally justifies summary dismissal.
Misconduct is less serious and generally warrants warnings and an opportunity to improve.
Your employment agreement or policy should define both with examples, and the definitions should be realistic. Labelling everything serious misconduct in a policy does not make it so, and an employer who dismisses for something the Authority considers ordinary misconduct is in a worse position than one who characterised it accurately.
Health and safety breaches
Worth specific mention. A serious breach of safety rules can be serious misconduct, and where an employee’s breach contributed to their own dismissal, the remedy position now reflects that.
But this cuts both ways. If the employer’s system was inadequate, the supervision absent, the training never given, or the schedule made compliance impossible, the employee’s breach sits in a context the employer created.
WorkSafe assesses the same facts under a different framework, and an employer relying on employee breach in an employment forum while facing a health and safety investigation should take advice on both together.
Capability is not conduct
A recurring and expensive error. Where someone cannot do the job — through lack of skill, or through ill health — that is a capability matter requiring support, training, an opportunity to improve, and genuine consideration of accommodation.
Treating a capability issue as misconduct is a reliable route to a grievance, and it will not establish contributory conduct because there was none.
Where health is involved, health information is personal information under the Privacy Act 2020 and requires careful handling — collected for a proper purpose, held securely, and not shared beyond those who genuinely need it.
The wellbeing dimension
Disciplinary processes are stressful for everyone involved, including the person running them and any witnesses.
Psychosocial risk falls within the health and safety duty. Practical measures: keep processes as short as fairness allows, tell people what is happening and when, offer support including any employee assistance programme, and do not leave someone suspended for weeks without contact.
Above the income threshold
Employees earning at or above $200,000 may not pursue unjustified dismissal or unjustified disadvantage grievances at all under the same Act.
That does not remove the value of process — contractual obligations remain enforceable, and other grievance grounds such as discrimination survive.
Employment New Zealand publishes guidance on disciplinary process and personal grievances free at employment.govt.nz, and the Act is available at legislation.govt.nz with no copyright in the official text.
Act in force 21 February 2026. General information only, not legal advice — take advice before dismissing.
